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ARC-IC and Illinois Tool

I hadn’t been considering ARC-IC for many situations as it seemed like one had to have 100% prevent plant in 2019 in order for it to trigger. However, I received enough calls from those with hail damage in 2019 to take another look at this.

Purdue University put together a great video that explains ARC-IC and situations where ARC-IC may trigger (two examples listed below). Check it out here: https://youtu.be/AwCMySwjWT4.

If you had the following two situations, it may be beneficial to check out ARC-IC.

  1. 100% prevent plant for 2019
  2. Planted entire farm but 2019 yields were below average (20% or more production loss)

NOTE: You will need to have worked through your 2013-2017 yields and also 2019 yields in order to look at ARC-IC. Yields for each crop need to be combined for irrigated and non-irrigated (blended yield) by year. If you have several tracts within a farm number, all the yields for same crop regardless of irrigation practice need to be combined by year. Doing this also allows you to look at any potential to update PLC yields.

The Texas A&M tool doesn’t allow one to look at ARC-IC. I realize I haven’t recommend the Illinois tool. However, they created a second tool (2018 Farm Bill What if Tool) and I apologize as I hadn’t been back to their site since December to see this. The first tool looks at the life of the farm bill and I felt it wasn’t as accurate because this is a 2 year decision instead of 5 year. However, the second tool looks at 2019-2020 and it also is very helpful when considering ARC-IC for single or multiple farms. This blog post will hopefully help you work through the Illinois “What If” tool for considering ARC-IC found at https://farmdoc.illinois.edu/2018-farm-bill.

Illinois tool.PNG

I recommend using the ‘2018 Farm Bill What if Tool’. Download the tool and it will appear as an excel spreadsheet. Enable editing.

arc ic single.PNG

At the bottom of the spreadsheet, you will see multiple tabs. Click on “arc-ic” if you’re interested in looking at only 1 farm number. The yellow boxes within the sheet contain either dropdown menus or can have data entered into them. Use the dropdown menus to select State, County, Number of crops, Crop (be patient and wait as it will think before changing the cell). Select “yes or no” from dropdown regarding which years the crop was planted and enter in the yield for that year for that crop. Remember the yield is the blended yield of irrigated/non-irrigated and for every tract within a farm number. Do this for each crop. *Note, in this example, the 2013 hail storm in this same area of the State also impacted yields.

calculation corn crop.PNG

This shows the calculations. When the crop wasn’t planted, the county yield is used. When the yearly yield is less than the County Yield, 80% of the T-Yield is automatically used. The yields are then multiplied by the higher of the market year average price or effective reference price to determine benchmark revenues. An Olympic Average (throw out high and low then average the other three revenues) is then determined for each individual crop.

arc ic single payment.PNG

For ARC-IC, the total base acres get combined together. So if there were 92.8 total base acres for the farm, and the other crop wasn’t planted, I put the total base acres into the crop that was planted. If both crops were planted, I split the base acres and entered the 2019 yields for each crop. If the farm was 100% prevent plant or had some portion of farm in prevent plant, make sure to designate those acres as such. I have been seeing this trigger for hail or other impacts to yield for 2019 if the loss was at least 20% of the 2013-2017 yields. In this case, the grower could receive a pretty substantial payment of around $47/base acre for 2019. Even if there’s no payment for 2020, this type of payment for 2019 far exceeds what is expected for potential payments from either ARC-CO or PLC at this time.

So what if you had more than one farm in a significant hail damaged area? You can also use this tool to look at multiple farms. 

arc ic multi

In the spreadsheet tab select “arc-ic-multi”. Select your state from drop-down menu. Then select how many farms you’re interested in looking at arc-ic and the crops. Be patient as it takes time for the tool to change cells. Then enter in your data for each farm. You will need to enter the total number of FSA base acres for that farm number (it’s not split by crop).

comparing arc ic multi

Once all the farm yields are entered, you can look at potential payments for individual farms by simply selecting “yes or no” in the expected payments portion at the end of the spreadsheet. You can also see what happens to potential payments when you select “yes” on multiple farms. Note:  for all farms enrolled in ARC-IC, all the base acres will be combined regardless of crop and regardless of farm number to determine payment per base acre and payment will be applied to 65% of total base acres.

This is very farm and situation dependent. If several farms are within one farm number and one farm had significant loss but the other(s) didn’t, it may not trigger ARC-IC. Same thing for prevent plant acres (if a portion of farm is planted and part is prevent plant, the yield of planted acres may result in too much revenue to trigger ARC-IC).

Situations where ARC-IC tends to trigger best are:

  1. When there’s one farm within one farm number and that farm either went 100% prevent plant or had a yield loss of 20% or greater for 2019.
  2. When there’s several farms within one farm number but all had 100% prevent plant and/or significant yield losses in 2019.

Hopefully this is helpful if you’re considering ARC-IC!

Additional Farm Bill Info: 

Farm Bill Decision Information

Farm Bill Decision Information
Jenny Rees, Extension Educator York & Seward Counties

*Caveat: This information is shared with the intent to better help growers make farm bill decisions with the best information we have available at this time. There is no guarantee of program payments or how the information below impacts individual farms. Ultimately, the decision is that of the person enrolling and making the program elections for the Farm Bill.

Deadline: Growers should make appointments now at your local Farm Service Agency (FSA) office to complete ARC/PLC election and enrollment forms. The deadline to enroll is Monday, March 16 for the 2019 crop year. You can change your elections up to March 16, 2020. Growers who don’t get enrolled by then will be ineligible to receive ARC or PLC payments for the 2019 crop year.

ARC-CO vs. PLC: This decision is different than the 2014 Farm Bill. We’re in a different price situation (lower prices) and the decision right now for 2018 Farm Bill is a 2-year decision (2019-2020), not the life of the farm bill. Please don’t assume that you should stay enrolled in what you were before.

Working through farm situations from different counties, for corn, PLC tends to be favored more than ARC-CO regardless if the farm had more irrigated or non-irrigated acres. However, soybean tends to favor PLC for a higher irrigated percentage and ARC-CO for farms with little to no irrigation. This does vary by county, so soybean can go either way. The reality is there may not be a soybean payment for either election. Wheat and sorghum tend to favor PLC. You’re only making this decision for two years. You can change your decision for 2021.

ARC-CO Calculation: To understand what potential price it may take for ARC-CO to trigger for any crop in your county, there’s a simple calculation you can do. Ask your local FSA Office for their 2019 Guaranteed Revenues and 2019 Benchmark Yields for each crop (updated February 2020).

Take your county guaranteed revenue for a specific crop and divide that by the county benchmark yield for that crop. For example, for irrigated corn in York County, the 2019 Guaranteed Revenue was $731.07. The 2019 Benchmark Yield (which is an Olympic average yield from 2013-2017) for irrigated corn in York County was 229.75 bu/ac. Taking $731.07/229.75 = $3.18. Based on these numbers a payment would not be triggered for irrigated corn in York County until a price of $3.18 is achieved. This is in comparison to PLC in which the trigger is $3.70 for the corn price (and we’re a lot closer to $3.70 than $3.18). Many of the counties for this area of the State were coming in at $3.18 corn price (irrigated and non-irrigated) in order for ARC-CO to trigger. This helps with decision making as it leans towards enrolling in PLC for corn. You can use this same calculation for other crops such as soybean, wheat, sorghum, etc. and compare the prices obtained vs. the PLC price for that crop.

PLC Yield Update: Your local FSA office can provide a sheet showing what yield is necessary to update your PLC yield for each crop. This can also be determined by taking your current PLC Yield and divide by 0.81. For example, a PLC corn yield of 190/0.81=234.57 bu/ac. Crop Insurance forms are necessary to determine if you can update yields. You will need the yields from 2013-2017. Use the Actual yields (designated with an ‘A’, not APH yields). Take the irrigated and non-irrigated yields for each farm number and divide by total acres to determine the blended yield for each farm number. If the yield is equal to or greater than the yield you need to prove for any of your crops on each farm number, your PLC yield can be updated for that crop. Landlords need to sign the form for updating PLC yields. They do not need to sign the form for election of ARC-CO or PLC if the ground is in cash rent.

Seed Corn Yields: To determine seed corn yields, if no commercial corn is grown in rotation on the farm, use the Plant Base Yield (PBY) not to exceed 120% of the county irrigated corn yield. For example, in 2013, York County Irrigated Corn Yield was 235.92 bu/ac. Multiply this by 120% = 283. 10 bu/ac. Compare this to the PBY for the same year and use the lower of the two numbers. If the farm has commercial corn in addition to seed corn in the rotation, the grower has the choice of applying the commercial corn yield or the equivalent seed corn yield as explained previously.

Decision Support Tools: If you use a decision support tool, I’m not recommending to use the Illinois tool. The Texas A&M tool considers your two-year decision. This blog post (https://go.unl.edu/texasam) has step-by-step screen shots to help if you wish to use the tool.

Historical Irrigated Percentage (HIP) is taken into account for the ARC-CO payments. For those using the Texas A&M decision tool, you will see a box to input HIP. There is an area for HIP on the 156EZ form. Counties that had to split out irrigated vs. non-irrigated acres for certain crops in the 2014 Farm Bill will have a HIP listed. Counties that didn’t have to do this will not have one listed. For those with the HIP listed, it may or may not be accurate depending on if you incorporated/lost irrigated ground in the past 5 years. For purposes of the Texas A&M tool, you can use your best estimate of irrigated vs. non-irrigated percentage. You can also adjust that estimate to see how it impacts potential payments.

 

JenREES 2-2-20

Been getting questions on the farm bill. It’s really important that growers make appointments now at your local Farm Service Agency (FSA) office to complete your ARC/PLC election and enrollment forms. Deadline to enroll is Monday, March 16 for the 2019 crop year. The election can be changed up to March 16. Growers who don’t get enrolled by then will be ineligible to receive ARC or PLC payments for the 2019 crop year.

If you use a decision support tool, I’m not recommending to use the Illinois tool as it takes into consideration the life of the farm bill. This is a two-year decision, thus, the potential payment numbers tend to be skewed and makes ARC-CO look more favorable than what it most likely will be. The Texas A&M tool considers a two-year decision and that’s the tool Randy Pryor and I recommend. On my blog, there’s step-by-step screen shots to help if you wish to use the tool. You can find it and previous blog posts at jenreesources.com. In the right-hand column under “categories” select “farm bill”.

Using the tool to work through farm situations from different counties, PLC keeps beating ARC-Co for corn. There’s a separation between the price it could take to trigger ARC-Co (previously around $3.18 for many counties) vs. PLC ($3.70) for corn. I’ve also played with the historical irrigation percentage (HIP). Everytime I’ve changed the HIP % for corn (0, 25, 50, 75, 100), it doesn’t switch the potential payment decision from PLC to ARC-Co. However, when I look at soybean, it’s tended to favor PLC for a higher irrigated percentage and ARC-Co for farms with little to no irrigation. This does vary by county, so soybean can go either way. If you’re really undecided, check this for yourself. You’re only making this decision for 2 years and there may not be a soybean payment for either election. Ultimately elections are your decision and the tools and info hopefully help as we can’t predict what prices will do.

Pesticide, Dicamba, Chemigation Trainings: I’ve also received questions regarding pesticide, dicamba, and chemigation trainings. If you haven’t received a postcard from NDA to pay the $25 bill within 14-17 days after training, please call the Extension Office in the county where you took the training; they can follow-up with NDA. The postcard will have a link to pay the $25 fee online. For those who don’t like paying online, you can also send a $25 check to NDA and include the postcard. For those who attended my training when I ran out of materials, I now have more so you are welcome to stop at the York Co. Extension Office and get the study guide and weed guide.

If you attend a face-to-face dicamba training through Extension or Ag Industry, please bring your pesticide applicator card as a pesticide applicator number is needed for registration. If you are a new applicator this year, you will write “pending” on the registration form. There is no charge for dicamba training, and the same training can be completed online at: https://pested.unl.edu/dicamba. Watching it at home as a group doesn’t work well because only one applicator number is entered to watch the training; there’s no way to add additional ones. Each person would have to be on his/her own device watching the training. Allow one week for your name to be added to NDA’s dicamba certified applicators on their site at: https://nda.nebraska.gov/pesticide/dicamba.html. Download the excel spreadsheet under ‘dicamba applicator training’ and make sure your name is listed. Then print the spreadsheet and keep it for your records.

For those recertifying for chemigation, you are allowed to watch the modules and take the test at home this year at: https://water.unl.edu/article/agricultural-irrigation/chemigation. This is only for recertifications. Initial certifications can watch the modules from home but still need to take the test at an Extension office. Anyone seeking initial or recertification is also welcome to attend face to face training.

JenREES 12-22-19

Thanks to Randy Pryor, Extension Educator Emeritus, for reviewing this article. Also, appreciate the growers who shared data and Farm Service Agency (FSA) personnel from several counties who answered my questions. Here’s more farm bill information.

PLC Yield: A few weeks ago, I mentioned you can obtain a sheet from your local FSA Office which shows PLC yields and necessary yield in order to increase PLC yield. If you don’t have that sheet, you can use your 156EZ form. Take your PLC yield and divide by 0.81 to get the yield necessary to increase your PLC yield. For example, a PLC corn yield of 190/0.81= 234.57 bu/ac. Your 2013-2017 RMA actual yields would need to show you’ve achieved at least 234.57 bu/ac in order to increase your PLC yield.

Seed Corn Yields: For seed corn yields, if the farm has commercial corn in addition to seed corn in rotation, the commercial corn yield will be applied to the seed corn. If no commercial corn is grown in rotation on the farm, use the Plant Base Yield (PBY) not to exceed 120% of the county irrigated corn yield. For example, in 2013, York County Irrigated Corn Yield was 235.92 bu/ac. Multiply this by 120% = 283.10 bu/ac. Compare this to the PBY for the same year and use the lower of the two numbers.

Historical Irrigated Percentage (HIP) is taken into account for ARC-CO payments. For those of you who are using the Texas A&M decision tool, you will see a box to input HIP. As you look at your 156EZ form, you will see an area for HIP. Counties that had to split out irrigated vs. non-irrigated acres for certain crops in the 2014 Farm Bill will have a HIP listed. Counties that didn’t have to do this will not have one listed. For those with HIP listed, it may or may not be accurate depending on if you incorporated/lost irrigated ground in the past 5 years. For purposes of the Texas A&M tool, you can use your best estimate of irrigated vs. non-irrigated percentage.

ARC-CO Calculation: Regardless if you’d like to try the Texas A&M tool or not, you can also get an idea of the price in which ARC-CO would trigger a 2019 payment by doing a simple calculation. Take your county guaranteed revenue and divide that by the county benchmark yield. For example, for irrigated corn in York County, the 2019 Guaranteed Revenue is $731.07. The 2019 Benchmark Yield (which is an Olympic average yield from 2013-2017) for irrigated corn in York County is 229.75 bu/ac. Taking $731.07/229.75= $3.18. What this means is that based on these numbers, if the York County RMA Yield comes in at 229.75 bu/ac, which is a trend adjusted yield, a payment would not be triggered for ARC-CO for irrigated corn in York County until a $3.18 corn price is achieved. This is in comparison to PLC in which the trigger is $3.70 for the corn price. Many of the counties in which I’ve done this calculation for irrigated corn have around a $3.18 trigger price for ARC-CO currently. That alone tells you a lot regarding decision making. If the trendline yield remains close to current one, it leans towards enrolling in PLC for irrigated corn, but it is a two year decision. You can also try other figures (ex. trying 235 and 220 bu/ac) if you think the trendline yields may be higher or lower than the current estimate to see other potential ARC Co price triggers.

Randy Pryor shared a spreadsheet with me from USDA that had all the yearly yields, trend yields, and revenue guarantees for each county and each crop in Nebraska to date. I’ve placed tables with these numbers on my blog at jenreesources.com for the counties in which I helped growers for the 2014 Farm Bill. You can also ask your FSA Office if they can provide this information for you.

FSA Meetings: If you missed the Farm Bill meetings and would like to better understand the differences between the 2014 and 2018 Farm Bills, please contact your local FSA Office. Many of them are having small meetings certain days of the week but can’t share which way you should enroll.

Texas A&M Decision Aid: Randy Pryor and I are recommending that if you use a decision aid, that you use the Texas A&M one. For those of you I worked with during the 2014 farm bill, I have your username and password if you no longer do. You can also reset it by calling their help line. I’ve assembled screen shots at https://go.unl.edu/texasam that walk you step by step through inputting data into the tool. If you have questions, please let me know. Hoping this is helpful!

*End News Column. County tables below.


York Co.Seward Co.Adams Co.Butler Co.Clay Co.Custer Co.Dawson Co.Fillmore Co.Franklin Co.Hamilton Co.Harlan Co.Kearney Co.Nuckolls Co.Pierce Co.Polk Co.Thayer Co.Wayne CoWebster Co.

Additional Farm Bill Info: 

JenREES 11-3-19

York County Corn Grower Plot Results and Banquet: The results of the York County Corn Growers plot can be found at: https://jenreesources.com/2019/11/03/2019-york-county-corn-grower-plot-results/. Special thanks to Ron and Brad Makovicka for their IMG_20191015_094139dedication and work in hosting! Also appreciate all the seed companies who participate! The York County Corn Grower’s Banquet will be held Tuesday, November 26 at Chances ‘R in York with social at 6:30 p.m. and dinner at 7:00 p.m. Tickets are $10 and may be purchased from any York Co. Corn Grower director or at the York Co. Extension Office.

Fall Nitrogen Application: With November here, a reminder to check soil temperatures before applying anhydrous ammonia to crop fields. Soil microbial activity and the rate of conversion of ammonium to nitrate is very low when the soil temperature is less than 50oF. Thus, apply fertilizer-N (and manure) when the soil temperature at the 4” soil depth is below 50°F and trending cooler. Daily and weekly soil temperatures (taken 4” below the surface of bare soil) can be found at: https://cropwatch.unl.edu/soiltemperature.

Extension Soil Fertility and Nutrient Management Specialists Javed Iqbal, Charlie Wortmann, Bijesh Maharjan, and Laila Puntel shared additional considerations for fall Nitrogen application in this week’s CropWatch: Apply anhydrous ammonia rather than other N fertilizers; Limit fall application of N to silt loam, silty clay loam, and finer textured soils; Use nitrification inhibitors to slow the conversion of ammonium to nitrate, especially on sand-dominant soils; Avoid fall application on wet soils; and Consider applying a lower base rate of nitrogen in the fall and plan on applying the rest at planting, or as a side-dress application.

On-Farm Research Protocols are available for anyone interested in fall vs. spring nitrogen management studies, inhibitor studies, or other potential on-farm research studies by contacting your local Extension educator. For growers within the UBBNRD interested in on-farm research studies that have a water quality focus, you may be eligible for additional support through the UBBNRD.  In some instances it may cover district staff and equipment use; in others, it may cover a portion of the costs of lab analysis of soil, plant tissue, or water samples. If you’re a grower interested in this type of study, please contact the UBBNRD or your local Extension Educator to talk through your study idea and for additional information.

Farm Bill Meetings: Joint Nebraska Extension and Nebraska Farm Service Agency (FSA) producer education meetings are scheduled at 28 locations across the state from late November to mid-December in advance of the coming ARC/PLC enrollment deadlines in early 2020. The meetings are free and open to the public. Advance registration is encouraged for planning purposes for materials and facilities. Attendees can register for any of the meetings conveniently on the web at farmbill.unl.edu or by calling or visiting their county FSA or Extension office. The educational programs will feature information and insights from FSA specialists and Extension experts, as well as other relevant information from local agencies.

Nearest locations for this area of the State include: Nov. 25. Community Center, Red Cloud (1-4 p.m.); Dec. 3 ENREC near Mead (9-Noon); Dec. 4 Ag Park in Columbus (9-Noon); Dec. 5 College Park in Grand Island (1-4 p.m.); Dec. 5. Opera House, Bruning (1:30-4:30 p.m.); Dec. 6 Fairgrounds Cornerstone Building York (9-Noon); Dec. 16. Extension Office Lincoln (9-Noon); Dec. 17 Fairgrounds 4-H Bldg. Beatrice (9-Noon); Dec. 17 Fairgrounds in Kearney (1-4 p.m.).

JenREES 1-13-19

Thank you to all the committee members, sponsors, exhibitors, presenters, attendees, and media coverage of the York Ag Expo last week! Great to see so many turn out for the educational sessions as well!

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Packed room for chemigation training at York Ag Expo.

Farm Bill: I was extra pleased with the excellent questions and discussion with the afternoon educational sessions at the York Ag Expo. The following are the major changes that Dr. Brad Lubben, Extension Farm Policy Specialist, shared during the Farm Bill imag7264

presentation. Farmers will have the opportunity to make a new election for either ARC-CO or PLC for the years 2019-2020 (a two year decision), after which the decision will be a yearly one (beginning in 2021) until the end of the farm bill period. There’s more changes to the ARC program than PLC. For ARC, the primary source of yield data will most likely be RMA crop insurance data instead of NASS survey data. The 25% factor used to establish ARC-CO coverage by irrigated or non-irrigated practice is no longer in effect. Instead, a farmer can make a request to the FSA committee if not less than 5% of the acreage was irrigated or not less than 5% was non-irrigated during the 2014-2018 crop years. Coverage is now tied to a physical county regardless of administrative county. The plug yield in ARC-CO increased from 70% to 80% of the transitional yield. There will also be a trend yield adjustment similar to the Federal crop insurance trend-adjusted yield endorsement. When Brad showed what this looked like if applied to the previous farm bill, it increased the bu/ac in all the examples he showed. Thus, he speculates it should improve the ARC-CO benchmark. Regarding PLC, producers will have the opportunity to consider updating yields on farms. There’s a specific equation that will be used and because it’s focused more on the 2008-2012 period to help those farms most effected by drought, it may not provide a benefit to all farms. It would still be worth working through the equation just to make sure for your individual farms. The other change to PLC is the equation for the effective reference price. In 2014, several of us in Extension worked individually with you to help you through these decisions using decision support tools. Money was not provided in this farm bill to support the computer tools so we’re still waiting to see if they will be developed. We’re assuming they will be. Yet the decisions this time may be more straightforward with making a decision for the first two years followed by annually vs. the life of the farm bill like what happened in 2014. All resources and information can be found at http://farmbill.unl.edu. Regarding ARC vs. PLC decisions, Brad shared the following points:

  • Under stable, lower price levels, PLC support will kick in before ARC support for downward price movement.
  • Under modestly increasing price levels, ARC and PLC support may quickly disappear.
  • Under substantially higher prices, moving average price in ARC benchmark and moving average price in PLC effective reference price could rachet up support to near equivalent levels.

Survey: Every year in Extension we write annual reports to justify the work we accomplished during the year. Last week I shared a survey link to provide me feedback regarding 2018 efforts. Thank you for those who have responded; I appreciate it!!! The survey truly is anonymous. For those who haven’t responded, I would greatly appreciate your feedback on this short survey at: https://app2.sli.do/event/q2p1sedv/polls. A year ago I changed the way I did my email list and news columns. My hope is that the format is more beneficial for us all in spite of the extra time it takes me each week. I’m genuinely open to and desirous of your feedback. Also, if you’re reading this and would like to be added to my email list, please email me at jrees2@unl.edu and I will add you.

Crop Production Clinics and Nebraska Crop Management Conference: Thank you to all who requested via surveys, emails, or phone calls in 2018 that you wanted to see the Crop Production Clinic back in the area! You were heard and one will be held in York at the Holthus Convention Center on January 17th! You can see the full schedule at http://agronomy.unl.edu/cpc. The Nebraska Crop Management Conference in Kearney on Jan. 28-29 has the same topics as Crop Production Clinics with additional topics and out of state speakers. You can view the registration for that conference at: https://agronomy.unl.edu/NCMC. While I realize many of you attend CPC for specific reasons, there is an opportunity this year to participate in a university research study and be paid for your time. Simanti Banerjee, an assistant professor in the Department of Agricultural Economics, is studying producer behaviors in response to farm bill programs. The study will take up to two hours. Average earnings from participating in the study are expected to be up to $100, depending on your decisions and those of other participants. All information collected is confidential and your responses are anonymous and will not be connected to your name. You can read more and register to participate in this study at this site: https://agronomy.unl.edu/crop-production-clinic-study-consent. Looking forward to seeing those who attend the upcoming CPC and NCMC!

Simplification and Accuracy in Texas A&M Farm Bill Decision Tool

As I work with producers and landlords, I’ve seen a variety of understanding and preparation for inputting information into the Texas A&M Farm Bill Decision Tool.  Previous blog posts have shared screenshots for inputting information.  What I will do with this blog post is share how to simplify the time spent inputting information while checking for accuracy of the information inputted.  You will only receive as accurate of information as what you input into the tool!

First, your best friend while inputting is the "eraser sheet" from FSA.  It lists CC yields, base acres, reallocated base, but best yet, it lists planted production by year from 2009-2012.  That seems to be the largest hang-up I have with producers and getting information to turn out correctly.  RMA acre data often includes additional acres that were once pasture or CRP that are now in production but not accounted for in your base acres with FSA.  So you have to use FSA production acres in this tool for the information to come out correctly for your farms.

First, your best friend while inputting is the “eraser sheet” from FSA.  It lists CC yields, base acres, reallocated base, but best yet, it lists planted production by year from 2009-2012.  That seems to be the largest hang-up I have with producers and getting information to turn out correctly.  RMA acre data often includes additional acres that were once pasture or CRP that are now in production but not accounted for in your base acres with FSA.  So you have to use FSA production acres in this tool for the information to come out correctly for your farms.  It also is a life-saver for farms that are joined together or split out….takes the headache out of figuring planted acres in those years!  Note:  The above eraser sheet is just an example so you know what one looks like.  It is NOT used for inputting or double checking in the next several screen shots.

Simple1

On the “edit” page when entering a farm unit, at the top of the page, you don’t need a description, but can add one if you wish. To simplify and save time on the bottom half of the page: ONLY entering CC yield and base acres for the specific crop saves a great deal of time. You don’t need basis, crop insurance, or insurance policy if you ARE NOT using this tool to make a crop insurance decision. You also only need “future acres” if you are interested in looking at crop insurance, or if you are interested in evaluating ARC-IC as an option. Inputting “0” for future acres just provides a summary of ARC-Co vs. PLC payment projections.  Then press “save”.

When entering yields, you need to enter one more date after all your yield data has been entered for the data to save properly.  In this example, I have inputted yield data for 2008-2012.  I then added "2013" and pressed "save yield data".  If you input 2013 yields, be sure to add a "2014" instead.  Not doing this step will delete your last row of yield information.

When entering yields, you need to enter one more date after all your yield data has been entered for the data to save properly. In this example, I have inputted yield data for 2008-2012. I then added “2013” and pressed “save yield data”. Not doing this step will delete your last row of yield information.  On “planted acres” use production acres from FSA vs. RMA as this provides the correct acres for base reallocation decision and thus, correct potential payments based on those acres.  2008-2012 is necessary to determine updated yield.  2009-2012 acres are needed for determining base reallocation.  The acres for 2008 will not influence or throw off the acres in this tool.

Simple2

For crops in which you have old base acres but you have not produced since 2008, you can enter yields by adding a “0” in them as shown here. This does take time, so you can also skip this step as shown in the next screen shot without affecting your analysis.

Simple9

UPDATE: If you wish to save additional time, you DON’T have to enter in “0” for yields for old base acre crops you didn’t plant from 2009-2012. Instead, on the home screen, simply hit “save” after entering in old base acres and CC yield for crops you no longer plant and skip entering yields for these crops. The output is the same (Thanks to Randy Pryor, Nebraska Educator in Saline County for this time-saving tip!)

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Once all your crop information is entered for every one of your farms, you need to double check your data. First, Click on the “Yield Update” decision tool. The first screen shows what you entered and gives you a chance to check your information. Double check that your CC yields are entered correctly and that the yields look correct for what was entered. If the information is correct, then click on the “information is correct” button. If it is not, click on “home” and go back to the crop and farm where the information needs to be corrected. Note that if you had a crop that did not have CC yield on your FSA sheet because you also had no old base acres for that crop, on the “Home” screen enter “0” for CC yield and “0” for base acres.  Then the County plug yield is inserted as the CC yield on this screen.

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You will then see the yield updates for all your crops on all your farms that you inputted. You can print this screen for your information. A couple things to look for on this sheet. Whenever the 2013 CC Yield is higher than PLC Yield, it’s probably wise not to change that yield. Also a note for corn in particular, I like to go through all the farms and highlight the farm with the highest PLC corn yield. When having difficulty making a decision between ARC-Co vs. PLC, crops with highest PLC yields will offer the best PLC payments.

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Next it’s time to look at the “base reallocation decision tool”. The first screen is a double check for you. It’s very important that the current base acres and reallocation acres match what was given you by the FSA office. Not inputting production acres based on FSA records (shown in top table) can throw off the potential base reallocation in the lower table. If the current base and potential reallocation base agrees with what was provided from FSA, simply push the “information is correct” button. If it doesn’t match, you will need to go back to the home screen and change the production acres so that the total production matches up to total base acres each year from 2009-2012 in order for the base reallocation to be correct. One more note: If you have split irrigated and non-irrigated acres, make sure to take a % of base acres assigned to the crop. (Ex. This farm has a total of 50 corn base acres. If 50% your acres are irrigated corn and you were in a county with split irrigated/non-irrigated opportunity, then assign 25 base acres to irrigated corn on the home screen and 25 base acres to non-irrigated corn).  Inputting 50 corn base acres for both irrigated corn and non-irrigated corn would give you a total of 100 base acres which is 50 acres too many and will provide incorrect information.

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Next you have an opportunity to select prices. I typically select USDA prices for all crops first. Then hit the “analyze” button. When the following screen appears, I click “download” then print the PDF that appears one-sided. This ensures that information for each farm number does not end up back to back with another farm number if you print two-sided. I then scroll to the bottom of this page, click “change prices” and click all the FAPRI prices, analyze, download, and print one-sided again. It does take some paper, but you’ll see why I recommend this shortly.  It also allows you to keep farms separate if you’re showing results to landlords and/or tenants.

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Once I print both sets of prices, the gals in my office and I staple together each farm number. We write “high” for FAPRI prices and “low” for USDA prices. I then place the High and Low together by farm number and farm by farm, go through the output with the farmers. Ultimately, I’m looking for trends when both the higher and lower prices agree. In this example, we are first looking at the base acre reallocation decision. Blue bubbles mean higher payments with reallocation; orange means higher payments without reallocation. Look at the bottom line for total payments. Notice in this example that for both low and higher prices, not reallocating the base is consistently higher. To help explain this, look at the base acre information below. What is occurring for this particular farm is a loss of grain base from 132 to 78.5 grain base acres. So essentially for this farm, the increase in corn base acres was not enough to off-set the milo payment from old base. The farmer then has to choose if he/she wants to reallocate base to what is currently planted, or retain base acres to protect grain base and obtain the milo payment. The other thing to notice is the decision of ARC-Co or PLC for each crop and how well they match between high and low prices. In this case, if the farmer chooses no reallocation, PLC is most consistent for milo and corn while ARC-Co is most consistent for soybeans. When both high and lower prices agree like this, it helps make decisions easier.  You can always go back and play with the prices more, but you have to be careful with that.  Remember, your decision ultimately is based on what you feel future prices will be for the next five years.

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The final thing I like to do is analyze the output for higher and lower prices crop by crop, especially for farms where Corn switches decisions on the first page from ARC-Co with FAPRI prices to PLC with USDA prices. It comes down to what the producer feels prices will be the next 5 years. I compare the ARC-Co vs. PLC prices for whichever decision the farmer makes regarding base reallocation. In this example, let’s say the farmer decides to not reallocate his/her acres. We then compare ARC-Co vs. PLC for both FAPRI and USDA prices for each crop. Besides the total payment over the length of the farm bill based on these prices, I also like to compare payments year by year with both options and look at probabilities of those payments based on the projected FAPRI and USDA prices. In this situation, PLC provides higher payments in both higher and lower price situations over the life of the farm bill.  ARC-Co provides slightly larger payments the first one or two years depending on price.  One thing to keep in mind: If FAPRI prices are correct, then the PLC payments for years 2015-2018 go to $0 because FAPRI is estimating prices above the $3.70 trigger price for corn. So why does the tool show a PLC payment for FAPRI prices? It is taking into account 500 scenarios at one time that all have a chance of occurring in the future and the probability of payment if prices are at, above, or below the predicted FAPRI price for each year.  Same for USDA prices.  So it’s important to always keep this in mind when analyzing the results.

Hopefully this post was helpful to you in understanding how to simplify your input into this tool, to understand the importance of accuracy, and to understand one way of analyzing data from the Texas A&M Decision tool!  You can view more information by checking out these YouTube videos.

Additional Farm Bill Decision Tool Information

I’ve really enjoyed working with producers and landlords on looking at farm bill decisions for individual operations.  A quick caution again regarding supplemental coverage option (SCO), you can only take price loss coverage (PLC) into account not PLC+SCO if you haven’t plugged the information into the Texas A&M farm bill tool correctly (meaning 10 years of yield data and all production information broken into crop insurance units for each FSA farm number).  You can always discuss SCO with your crop insurance agent but the tool itself won’t provide correct output without inputting numbers correctly.  You can simply remove SCO from the tool information by not selecting a crop insurance option on the first home screen of each farm unit you input into the Texas A&M tool.  I have screen shots with additional information in this blog post.

I’m willing to work individually with those interested in looking at the Texas A&M tool for your decisions.  Please call (402) 762-3644 to set up an appointment.  You will need to bring the following with you:

  1. Your CC yields from FSA (the ones sent in July/August tend to have all your CC yields for all your current base acres). You could also request your FSA 156-EZ form for this information.  Or better yet, ask for FSA’s eraser sheet for each of your farms.
  2. Your base acres and potential base reallocation information FSA sent you.
  3. Yield production history from 2008-2012 by crop.  If you were in the ACRE program during the last farm bill, please also ask them for the screenshot of all your yield production history.  Since you had to prove yields with that program, your production information is already in their system.  If you weren’t in ACRE, you will need to fill out the price loss coverage form FSA sent you.  You can obtain this information from your crop insurance records or from scale tickets by farm if you don’t have crop insurance information.  You will not have to prove yields at the time of signing up, but please keep your records as you will need to prove how you obtained this information in the event you are spot-checked.  Here’s more information regarding yields.

When determining your yield history from 2008-2012, for combined counties, FSA is looking for a total combined production (not a weighted production based on irrigated vs. dryland acres).  If you have crop insurance information, add up the total production in bushels for irrigated and dryland by crop (ex. Corn) for each FSA farm number and total the acres of each production entry.  Then divide production by total acres to determine your yield.  It’s important you use RMA production data, not APH yield as the APH yield may incorporate other modifications to actual production.

For split counties, I’ve been recommending to keep dryland and irrigated production split on the top part of the FSA PLC form and then the combined yields at the bottom part of the form.  This allows you to have the split yield information for the Farm Bill Decision Tool and also the combined yield data that FSA needs.  Add up dryland production by FSA farm number and irrigated production by that farm number.  When inputting data from a split county into the Texas A&M decision aid, you will need to allocate base acres on a percentage of the irrigated vs. dryland acres.  For example, if 50% of the land in one FSA farm number is irrigated and you have 200 acres, then 100 acres would be used for the base acres in the decision tool for irrigated yields and 100 acres would be used in the tool for dryland yields.  Your CC yield will remain the same for both irrigated and dryland by crop.

Inputting Data into Texas A&M Farm Bill Decision Tool

Last week was enjoyable working with farmers on Farm Bill decisions.  I’ve decided to work with producers on an individual basis.  If you are interested in help looking at your potential options using the Texas A&M model or would like another set of eyes to make sure the data was inputted correctly, please call (402) 762-3644 and Deanna or Holli will get you scheduled for a time.

One caveat is that this model is only as good as the data you input into it and your decisions

Example of FSA "eraser sheet" courtesy of Randy Pryor, Nebraska Extension in Saline County.

Example of FSA “eraser sheet” courtesy of Randy Pryor, Nebraska Extension in Saline County.

are based on where you feel potential prices the next five years will be.  You need your CC yields and base acres from FSA as well as production history since at least 2008 (2003 if you wish to run crop insurance tool).  Requesting a copy of the FSA “eraser sheet” is a great tool to check on planted and crop production planted acres and to see if reallocated base jives with the computer program.  The Texas A&M simulation at https://usda.afpc.tamu.edu/ isn’t difficult to run, but it can be confusing as to what number to input where.  Begin by registering at the site by providing an email address and password.  Then login and you will see the following screen.

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It is important for you to decide what you want the tool to analyze for you. It can analyze: yield update, base reallocation, ARC vs. PLC, and crop insurance (shown in right-hand column in screen-shot, or can also be selected from “Tools” in top drop-down menu). If you want to analyze crop insurance decisions, EACH crop insurance tract needs to be entered as a “new farm unit” under each FSA farm number. It takes a lot of time and it can be done, but that’s the only way to use this tool to also look at crop insurance including supplemental coverage option (SCO).

If you do not want to look at crop insurance decision but wish to consider the first three decisions, then for counties such as Clay County with COMBINED irrigated and dryland county yields, completing the Price Loss Coverage (PLC) Yield Worksheet (CCC-859) from FSA with your combined irrigated and dryland yields for each FSA number will greatly aid you in inputting the data.  For counties with any splits in irrigated and dryland yields, I recommend placing irrigated and dryland production separately on the top of the PLC Yield worksheet, and then combining production by crop towards the bottom of the worksheet.  Regardless of if your county has the opportunity for a split irrigated/non-irrigated payment, all CC yields in Nebraska are combined by crop (regardless of irrigation or not), so FSA will want a combined yield by crop on their form.

EACH crop needs to be entered as a separate farm unit. I have created a fake account to walk you through a simulation.

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Some are having a difficult time finding “rate yield” on their crop insurance forms. It is not critical if you are not using the crop insurance tool and the same Approved APH yield can be inputted for the rate yield as well. If using the crop insurance tool, the correct rate yield from crop insurance must be used.  UPDATE:  If you ARE NOT interested in analyzing crop insurance information, “0”  can be inserted for basis price, rate and APH yields, and select “none” for crop insurance.  If you are also not interested in analyzing ARC-IC, then “future acres” can also be entered as “0”.

When entering yields, you need to enter one more date after all your yield data has been entered for the data to save properly.  In this example, I have inputted yield data for 2008-2012.  I then added "2013" and pressed "save yield data".  If you input 2013 yields, be sure to add a "2014" instead.  Not doing this step will delete your last row of yield information.

When entering yields, you need to enter one more date after all your yield data has been entered for the data to save properly. In this example, I have inputted yield data for 2008-2012. I then added “2013” and pressed “save yield data”. If you input 2013 yields, be sure to add a “2014” instead. Not doing this step will delete your last row of yield information.

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Notice that each crop needs to be added as a separate farm unit. If using the crop insurance tool, each crop insurance tract under each FSA farm number needs to be added as a separate farm unit. Be sure to split out base acres among the tracts and be sure that the total base acres add up to the total base acres from FSA.

For entering separate crop insurance tracts, the CC yield should remain the same for all dryland tracts under one FSA farm number (same for irrigated).  However, you will have to split out base acres amongst the tracts and you need to make sure the acres inputted add up; please double check this!

For your yield update and base reallocation information:  For some of you, the base reallocation acres in the tool have been slightly different than what you received from FSA office.  That may be because risk management agency (RMA) acres were used and were different than the production acres FSA had on file.  You need to use the FSA acres for planted acres when using this model if they differ from the RMA ones.

When running this model, on many farms PLC + SCO looks favorable for some crops.  A word of caution, you can consider PLC but should not consider SCO in your decision if you have not broken everything out into crop insurance tracts and included 10 years of production history into the tool.  So in the decision of reallocating base acres or not, in the final summary section that gives you total numbers, anytime PLC+SCO is shown for a particular crop and you have not included the proper crop insurance info, you need to re-calculate the final total by hand using PLC ONLY from the table above that area.  It normally doesn’t change the outcome that the decision tool provides, but it can.  I’m not saying that SCO shouldn’t be considered, what I’m saying is that the numbers provided in the tool are not accurate if you have not inputted the data in the way needed to look at crop insurance decisions.

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In this example, you notice three tabs: Base reallocation, risk chart, and per crop analysis. The green tab shows what you are looking at-in this case base reallocation. Notice there are two charts: The top one shows ARC-Co, PLC, and PLC+SCO. Blue circles indicate best option with reallocating base acres while orange circles indicate best option without reallocating base acres. The second table gives you your totals. Notice in this table and the one above that PLC+SCO are shown as the best options for corn. However, in the total, because we did not separate the crop insurance tracts in this FSA farm number and because I didn’t include 10 years of yield data, I need to recalculate the totals by looking at the top table for the next highest prices under ARC and PLC. So for this example, to refigure best reallocation of base payment total, I would take the $8093 listed in PLC, reallocation for corn since it is higher than ARC and add it to the $4612 for soybean payment to get: $12,705 for base reallocation. For no base reallocation, I would add $10,791 from PLC since higher than ARC in this example and add it to $3075 to get a total of $13,866 for no base reallocation. Most of the time, the outcome stays the same, but there are a couple instances it has changed, so wanted to make you aware of the importance of this.

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Or to get around having to hand-calculate removing SCO from the total decisions, Randy Pryor and Paul Hay, Nebraska Extension in Saline and Gage Counties respectively, discovered that if you select “no crop insurance policy” on the edit screen for each farm unit, that it automatically takes out adding SCO into your final calculated options as you can see from the next screenshot!

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When not adding crop insurance tract info and 10 year yield history information to be able to analyze Supplemental Coverage Option (SCO), removing crop insurance from the beginning edit screens allows you to analyze base reallocation and ARC-Co vs. PLC program options without having to recalculate and remove SCO. It won’t give you a higher SCO payment number when adding information in this way.

Some of you have questioned why PLC even lists a payment when prices are inputted higher than the benchmark price of $3.70 for corn, etc.  The Texas A&M tool is giving you essentially a bell curve of 500 random outputs with the distribution of that curve around the particular price you input for each crop.  So with every given price you input, there’s a certain probability that the price will be at, above, or below that particular price.  That’s essentially what the red, green, yellow bars are showing you on the analysis.  So you’re assessing where you feel prices will be, what decision will allow you to best sleep at night, the potential of spreading out risk with several farm numbers by choosing different options, etc.  You can also view the YouTube videos from Texas A&M with more information!

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Winter Meetings Week Jan. 12th

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Well-attended Farm Bill informational meetings in December throughout the State.

Tis the season for winter programming!  The following are a few upcoming meetings occurring this week.  Winter program brochures were mailed a few weeks ago, so please check those for additional meetings.  Looking forward to seeing you at upcoming meetings this winter!  A reminder that if you plan to attend any of the upcoming Crop Production Clinics, that you need to register online by 3:00 p.m. the previous day of the clinic. Crop Production Clinics this week will be held in Kearney on Tuesday the 13th and at York on the 14th.

Farm & Ranch Business Succession & Estate Planning Workshops:   This is a very important topic for farm families to consider!   Two workshops will be held in our area; one in Blue Hill at the Community Center on January 13th and one in York at the Country Club on January 15th.  The workshop will go from 9:00 a.m. to 2:30 p.m.  There is no charge for the workshops, but you need to register by calling the Rural Response Hotline at 1-800-464-0258.  Please register by January 10 for Blue Hill and January 12 for York.
The workshop is intended to be useful for established farm and ranch owners, for their successors, and for beginners.  Topics include:  the stages of succession planning, contribution & compensation, balancing the interests of on-farm and off-farm heirs; the importance of communication, setting goals, analyzing cash flow, and balancing intergenerational expectations and needs; beginning farmer loan and tax credit programs; the use of trusts, wills, life estate deeds and business entities (such as the limited liability company) in family estate and business succession planning; buy-sell agreements, asset protection, taxation (federal transfer taxes, Nebraska inheritance tax, basis adjustment), and essential estate documents.  Presenters are Dave Goeller, Deputy Director, Northeast Center for Risk Management Education at UNL and Joe Hawbaker, Agricultural Law attorney from Omaha.
This workshop is made possible by the Nebraska Network for Beginning Farmers & Ranchers, the Farm and Ranch Project of Legal Aid of Nebraska, National Institute of Food and Agriculture, the Nebraska Department of Agriculture’s Farm Mediation, and the University of Nebraska Extension.  More information can be found here.

Farm Bill Education Training January 14thFor those of you that would like to learn more about the Texas A&M Agricultural Food Policy Center comprehensive Farm Bill Decision Aid computer program, a hands-on training will be held Wednesday, January 14, 2015 at the new Nebraska Innovation Campus Conference Center, 2021 Transformation Drive in Lincoln, Nebraska.  Workshop presenters will be Dr. James Richardson, Ag. Economist from Texas A&M and Dr. Brad Lubben, UNL Extension Ag. Economist.  Dr. Richardson is the author of new, cutting edge, computer decision tool, endorsed by USDA. Those attending will learn how to use the Texas A&M Computer Decision Aid, how to interpret the results and how managing risk is integrated into the model. Participants are encouraged to bring their own iPad, tablet or laptop computer.  For information about the workshop go to: http://bit.ly/1wh96bm. Participants need to pre-register at http://go.unl.edu/farmbill.  The workshop will be from 9:00 a.m. to 4:00 p.m. with morning registration and refreshments available starting at 8:15 a.m. at the new NIC auditorium. There is a $30.00 registration fee which includes the noon meal, refreshments and meeting materials.  Web links to the meeting can also be purchased by contacting the Saline County Extension Office at (402) 821-2151.  For additional information about the farm bill go to: http://farmbill.unl.edu.

Next Heuermann Lecture will be Jan. 13th at 7:00 p.m. at Nebraska Innovation Campus (2021 Transformation Drive in Lincoln, Nebraska) on the topic of “Genetically Modified Animals:  the Facts, the Fear Mongering, and the Future”.  Presenter will be:  Alison Van Eenennaam, University of California – Davis, 2014 Borlaug CAST Communication Awardee.  For more information, go to: http://heuermannlectures.unl.edu/.  If you cannot make it to Lincoln, you can watch it live via video at the website link.

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